Global Hunter Reports Strong Q4 Results For Yuhe

According to Global Hunter, Yuhe International YUII saw strong Q4 results and 2011 guidance. Global Hunter reported that Yuhe reported strong Q4 and FY2010 results, beating its estimates and consensus as well as its prior guidance. “The company has also offered FY2011 net income guidance in the $33MM to $36MM range, compared to our prior estimate of $33.7MM. On an EPS basis, this translates to $1.57 to $1.72, using a fully diluted share count of 21MM, and corresponds to ~40% Y/Y growth. YUII generated $17.4MM in operating cash flow in 2010 and finished the year with basically $0 accounts receivable. The company recognized a $53.8MM non-cash and non-operating expense in Q4 related to the share transfer between Mr. Yamamoto and Mr. Gao, which is a non-recurring issue related to the slow walk provision from the company's preexisting legal structure. Following the recent acquisitions, Yuhe has grown to become the largest day old broiler producer in China with a production capacity of about 265MM day-old broilers in 2011 and over 400MM birds in 2012. We continue to believe that shares of YUII remain significantly undervalued at these levels and reiterate our $16 price target.” Yuhe International closed yesterday at $6.66.